8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: (Date of earliest event reported) January 9, 2014

SWS GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-19483	75-2040825
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1201 Elm Street, Suite 3500

Dallas, Texas 75270

(Address of principal executive offices and zip code)

(214) 859-1800

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Item 8.01 Other Events.

On January 10, 2014, SWS Group, Inc. (the “Company”) announced that it received an unsolicited acquisition proposal dated January 9, 2014 from Hilltop Holdings Inc. (“Hilltop”) to acquire all of the outstanding Company common stock that Hilltop does not already own for $7.00 per share in 50% cash and 50% Hilltop common stock.

Consistent with its fiduciary duties and in consultation with its financial and legal advisors, the Company’s Board of Directors (the “Board”) will review the proposal to determine the course of action it believes is in the best interests of the Company and its stockholders. The Board will make its formal recommendation to stockholders in due course. The Company’s stockholders are advised to take no action at this time.

A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated by reference herein. A copy of the proposal is attached hereto as Exhibit 99.2.

Item 9.01(d). Exhibits.

Exhibit 99.1	Press Release issued by SWS on January 10, 2014.
Exhibit 99.2	Letter from Hilltop Holdings Inc. dated January 9, 2014.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	SWS GROUP, INC.
Date: January 13, 2014	By:	/s/ J. Michael Edge
		J. Michael Edge
		Chief Financial Officer

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EXHIBIT INDEX

Exhibit No.	Description
Exhibit 99.1	Press Release issued by SWS on January 10, 2014.
Exhibit 99.2	Letter from Hilltop Holdings, Inc. dated January 9, 2014.

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EX-99.1

Exhibit 99.1

SWS Group Confirms Receipt of Unsolicited

Acquisition Proposal from Hilltop Holdings

SWS Stockholders Advised to Take No Action at This Time

DALLAS, January 10, 2014 – SWS Group, Inc. (NYSE: SWS) today confirmed that it received an unsolicited acquisition proposal from Hilltop Holdings Inc. (NYSE: HTH) to acquire the outstanding common stock that Hilltop does not already own for $7.00 per share in 50% cash and 50% Hilltop common stock.

Consistent with its fiduciary duties and in consultation with its financial and legal advisors, SWS Group’s Board of Directors will review the proposal to determine the course of action that it believes is in the best interests of the Company and its stockholders. The SWS Group Board will make its recommendation to stockholders in due course. SWS Group stockholders are advised to take no action at this time.

About SWS Group

SWS Group, Inc. is a Dallas-based holding company offering a broad range of investment and financial services through its subsidiaries. The Company’s common stock is listed and traded on the New York Stock Exchange under the symbol SWS. SWS Group, Inc. subsidiaries include Southwest Securities, Inc., SWS Financial Services, Inc., and Southwest Securities, FSB.

Forward-Looking Statements

This news release contains forward-looking statements. Readers are cautioned that any forward-looking statements, including those predicting or forecasting future events or results, which depend on future events for their accuracy, embody projections or assumptions, or express the intent, belief or current expectations of the company or management, are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially as a result of various factors, some of which are out of the

(more)

SWS Confirms Receipt of Proposal / 2

Company’s control, including, but not limited to, volume of trading in securities, volatility of securities prices and interest rates, liquidity in capital and credit markets, availability of lines of credit, customer margin loan activity, creditworthiness of the Company’s correspondents, trading counterparties and customers, demand for housing, general economic conditions, especially in Texas and New Mexico, changes in the commercial lending and regulatory environments and other factors discussed in the Company’s Annual Report on Form 10-K and in the Company’s other reports filed with and available from the Securities and Exchange Commission.

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Contact

Ben Brooks, Corporate Communications (214) 859-6351, bdbrooks@swst.com

or

Steve Frankel / James Golden / Scott Bisang,

Joele Frank, Wilkinson Brimmer Katcher

(212) 355-4449

EX-99.2

Exhibit 99.2

[Letterhead of Hilltop Holdings Inc.]

January 9, 2014

Mr. Jim Ross

President and Chief Executive Officer

SWS Group, Inc.

1201 Elm Street, Suite 3500

Dallas, Texas 75270

Dear Jim,

It has been a pleasure to work with SWS Group, Inc. since Hilltop Holdings Inc. made its investment in the company in July 2011. We sincerely appreciate our relationship and have genuine respect for your employees and board. Therefore, we are excited to communicate our interest in merging SWS into Hilltop and outline the significant terms of our proposal. As our businesses are highly complementary, we believe that a combination will generate significant benefits for both of our customers, employees and stockholders.

Hilltop, a public financial holding company, currently has over $9 billion in assets, $1.2 billion of equity, approximately 4,750 employees and significant excess capital. Through our operating companies, we have four business segments—banking, mortgage origination, financial advisory and insurance. Hilltop is led by its Chairman, Gerald J. Ford, who has an established track record of acquiring financial institutions and creating substantial stockholder value. Our 24% beneficial ownership interest in SWS is important to us, as it prompted our desire to build a premier Texas-based bank and prominent diversified financial services company. Since, Hilltop has been very active, completing the acquisition of PlainsCapital Corporation in November 2012 and the FDIC-assisted acquisition of First National Bank of Edinburg in September 2013.

We believe that a combination would provide strategic benefits to both SWS and Hilltop. The merger of First Southwest and Southwest Securities would create the dominant Texas-based broker/dealer with significant strengths in municipal finance and clearing. The combined broker/dealer will be well positioned to compete and grow on an expanded platform. Upon merging the two banks, PlainsCapital Bank would become the 4th largest Texas-based bank by deposits. Hilltop’s capital position would maintain the strength of the combined bank and provide opportunities for loan growth. Additionally, SWS stockholders would benefit from Hilltop’s diversified and profitable operating segments.

Our proposal is to acquire all of the outstanding SWS common stock that Hilltop does not already own for $7.00 per share in 50% cash and 50% stock. We believe that our proposal offers compelling value for SWS stockholders, as it provides a premium to market, immediate and certain value with the cash consideration and the opportunity to participate in the success of the combined company through our stock.

Our proposal is subject to the approval of the SWS board of directors, the execution of a definitive agreement and subsequent approval by SWS stockholders. There will not be a financing contingency or any required approvals by Hilltop stockholders. Our transaction, however, will be further subject to customary and usual closing conditions, including obtaining required approvals from regulators. Due to our existing investment, we do not anticipate significant due diligence or any obstacles in consummating a mutually beneficial transaction promptly.

The proposed transaction also will require the consent of Oak Hill Capital Partners pursuant to existing debt and related agreements with SWS. Accordingly, any transaction will be subject to such consent and the restructuring of the existing debt and related agreements or, in the alternative, the exercise of their warrant. We intend to commence those discussions with Oak Hill immediately.

Consistent with our obligations under the U.S. federal securities laws, this letter will become publicly available when we file it with an amendment to our Schedule 13D.

We look forward to further discussing our proposal with you, and hope to expeditiously enter into a definitive agreement.

Very truly yours,

/s/ Jeremy B. Ford

Jeremy B. Ford

President & Chief Executive Officer